Australia's Central Bank Faces Fourth Rate Hike Pressure

Australia's central bank is facing pressure to raise interest rates again, with market pricing indicating a high chance of a fourth rate hike on September 29 and potentially even a fifth by early next year.

RBA Governor Michele Bullock is under scrutiny as inflation remains above target, and the economy shows signs of overheating. According to Westpac Chief Economist Luci Ellis, institutional traders have shifted their expectations from a 50/50 chance on August 31 to an overwhelming 76% expectation of a rate hike in September.

The expected cash rate increase would be from 4.35% to 4.60%, with some market pricing already factoring in a fifth rate hike by early 2027, which could push the peak cash rate to as high as 4.8%.